Moody's may cut six paper firms' ratings
Moody's may cut six paper firms' ratings
NEW YORK (Reuters): Moody's Investors Service has placed the long term debt ratings of six Indonesian paper companies under review for possible downgrade.
This action is prompted by the economic and financial turmoil that sparked the downgrade of the sovereign rating of the Republic of Indonesia from Baa3 to Ba1, the rating company said. Ratings under review are:
Asia Pulp & Paper group: APP Finance (II) Mauritius Ltd. Floating Rate Perpetual Preferred; "b3", APP Global Finance (III) Cayman Ltd. Senior Unsecured Euronotes; B3 , APP Finance (VI) Mauritius Ltd. Guaranteed LYONs; B1, APP Global Finance Ltd. Floating Rate Euronotes; B1, APP International Finance Company B.V.: (all debt guaranteed by Asia Pulp and Paper Ltd.)
Indah Kiat:
PT Indah Kiat Pulp & Paper Co. (secured); Ba2 Indah Kiat Finance Mauritus Ltd. (guaranteed by Indah Kiat Pulp & Paper); Ba3
Indah Kiat Int'l Fin. Co. B.V. (guaranteed by Indah Kiat Pulp & Paper) Senior Secured; Ba2 Senior Unsecured; Ba3
PT Pabrik Kertas Tjiwi Kimia:
Tjiwi Kimia International Finance Co. B.V. (guaranteed by PT Pabrik Kertas Tjiwi Kimia); Ba3, Tjiwi Kimia International Finance Mauritius Limited (guaranteed by Tjiwi Kimia); Ba3
PT Pindo Deli Pulp & Paper Mills: Pindo Deli Finance Mauritius Ltd. (guaranteed by PT Pindo Deli Pulp & Paper Mills); Ba3
APRIL group:
PT Inti Indorayon Utama Sr. Notes; Ba3 Indorayon International Finance (guaranteed by PT Inti Indorayon Utama); Ba3
PT Fajar Surya Wisesa:
FSW International Finance (guaranteed by PT Fajar Surya Wisesa); B1.
In its review, Moody's will focus on the implications of the current economic and political situation in Indonesia for the operating outlook and financial flexibility of the pulp and paper industry.
Factors to be evaluated include the impact of currency devaluation on cost structures and local market price realizations, as well as the outlook for paper product demand for domestic consumption and indirect exports.
The rating agency will also assess the prospective supply- demand balance in East Asia in view of the significant planned capacity increases and reduced expectations for consumption in the region.
Asia Pulp & Paper Company Limited, headquartered in Singapore, is one of the world's largest paper companies. Its rated operating subsidiaries, all located in Indonesia, are PT Indah Kiat Pulp & Paper. PT Pabrik Kertas Tjiwi Kimia, PT Pindo Deli Pulp & Paper Company, and PT Lontar Papyrus Pulp & Paper Company.
In addition, Asia Pulp & Paper Company has several related borrowing subsidiaries. APP Group companies produce bleached hardwood kraft pulp and white paper, as well container board and some tissue.
Asia Pacific Resources International Limited (APRIL), also located in Singapore, has one Indonesian-based rated operating subsidiary PT Inti Indorayon Utama.
The APRIL Group of paper companies produce pulp and rayon, and are expanding into white paper. PT Fajar Surya Wisesa, located in Jakarta, is a small box board and container company. FSW International Finance company is its rated finance subsidiary.